Demers, who moved to Juneau 13 years ago, was treasurer of the folk festival for five years ending with his resignation in May 1999. During that time, he allegedly stole from the nonprofit group's accounts dozens of times, according to court records.

On Friday, the 48-year-old Demers was charged with one count of second-degree theft and one count of altering business records. A summons has been issued, with Demers' arraignment likely to occur Thursday.

Both of the charges are felonies. If found guilty, the maximum penalty for each offense is five years in prison and a $50,000 fine.

Riley Woodford, president of the festival and a Juneau Empire reporter, said a letter of explanation will be sent to the 742 dues-paying members of the festival this week.

``We completely trusted him and he betrayed us,'' Woodford said. ``He took advantage of the trust.''

Demers did not return messages left for him at his job. He did not answer calls to his home.

Woodford and the organization's current treasurer, Jim Grammel, said they realized something was wrong with the festival's books in October. The bank balances didn't match up with the assets recorded in a tax return.

They said about $9,000 is missing from bank accounts and another $3,000 or so never made it into the bank.

Grammel said the dubious transactions were spread out over years, with the amounts varying. As the folk festival's new treasurer, he's decided to supply basic fiscal information, such as bank statements, to board members from now on, he said.

``They'll all be more interested in it now,'' Grammel said. ``People say: `We trust you. You're honest.' You can't do that. I couldn't figure out if he thought the board wouldn't ever figure it out. It didn't take me very long at all. The numbers didn't add up. I started reconciling things, and things started popping up. He'd write a check down in the ledger saying it was $25. The bank would say it was $125.

``He was so bold at the end, right before the festival in 1999, he wrote six checks to Centennial Hall in the ledger ... When we got copies, two of them were just written to Jim for $465.

``In December, we called the cops,'' Woodford said. The police investigation led to police interviewing Demers on June 21. According to Juneau District Attorney Rick Svobodny, Demers confessed to having embezzled from the folk festival and offered to pay restitution. However, Svobodny said, Demers told police he stole between $3,000 and $4,000 -- which is less than what folk festival officials said is missing.

Demers wasn't paid for his bookkeeping work. Board members are all volunteers. Woodford said the job probably took up five or 10 hours a week for the three months leading up to the annual festival, which has been a Juneau event for 26 years.

Several hundred volunteers, including performers, help produce the week-long spring festival, which draws close to 1,000 people per night.

The folk festival costs about $50,000 a year to produce, said Woodford. Over the years, the festival has saved about $40,000, less what's been found to be missing, he said. Future folk festivals are not at risk due to the missing money, he said.

Woodford said Demers explained to the board that the festival had been losing money due to decreased contributions. ``He told us that we were losing money because members were donating less ... memberships are down,'' he said.

Grammel said the board wanted people to know about Demers, rather than try to solve the problem internally, in part because of Demers' public face.

``I think it's really a sad thing for the festival that this happened because it's just not what the festival is about,'' he said. ``He was out there showing himself off as assembly candidate. We felt like the community really needed to know about this.''

Demers is retired from the U.S. Coast Guard, and currently works as a driver and manager at the Juneau Trolley Car Co. He was also involved with the trail improvement organization Trail Mix in its formative years.

Jim King, Trail Mix's executive director, said he's not concerned about the organization's books in light of the charges against Demers. Back when Demers was involved, he said, Trail Mix didn't have much in the way of money in the bank -- maybe a couple of hundred dollars.